Tax free childcare 2015 - how will it work with nannies?

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We're trying to work out if we can afford a nanny next year, 3DCs 1 of whom is at school. We currently use a nursery and childcare vouchers, and need to compare the costs. I can't seem to find information for how the new scheme works with a nanny, as the government payment is a percentage of the fees per child rather than a fixed amount.

How do we work out what we would get per child, given that the nannys hours and fee would be the same irrespective of which children are there; but one will only be there after school and holidays, and one will attend nursery for the 15 free hours

Thanks

From what I understand so far, it should work in the same way as childcare vouchers does now.

Part of the nannies salary is paid direct by parents, the other is paid by the voucher company - so from the NS&I account under the new system.

The thing that seems different is that each Child has their own account, though I think parents will be able to merge them, so one payment gets made taking money from each Childs pot.

Nanny will need to be registered/approved as per current voucher scheme rules.

The percentage bit I don't understand either. Would you simply take the total cost and divide by the number of children?

What if you have 3 children but only 1 is eligible under the new scheme, would you still divide by 3 or would you just say that total childcare cost was the full amount.

I expect there will be more details once nearer the scheme start date as to how childcare cost is determined. Hope they think about what happens in various circumstances, nannies are not paid per child, parents have more than 1 child and may have 1 or more children who are too old to get anything under the scheme.

Yes these are all the questions, and could make quite a big difference financially. Working out how much of a nanny's wage could be attributed to each child could get very complicated. The older children thing wouldn't affect us, but if that makes up part of the nanny's work then that's an issue too.

Makes it really hard to do the maths without more info

Tax-Free Childcare is latest I can find about the scheme.

Looks like for each child up to £2000 can be put in every 3 months, government then adds £500 and can pay some or all of the money to the childcare provider.

If a nanny cared for 3 children, 2 who had accounts and one who was older and thus did not qualify, what would happen?

If nannies salary was £1800 (trying to keep this simple) per month, then would parents put in £1000, made up of 2 x 500. Government adds 20% so making that worth £1200. Then that being paid to the childcarer, plus parents then pay the rest £600 direct to nanny?

My understanding is that a parent can pay up to £10,000 in to the new account and for every £1 the parent pays in the Government pay in 20p so if you pay the full amount they give you £2000 and this is per child but I think it up to 3 children only and if your childcare costs are only £2000 then you will only get £400. I think you will be able to do it from age 0 to 12. The current voucher system can be used up to 16. It can be used for any Ofsted Registered carer so it would apply to Osted Reg Nannies.

Currently how much do you get given by Government using childcare vouchers? The saving amount is not that high, for some it may be less than £1000 a year, per parent able to get vouchers.
So if that is the case for you, then you are getting say £2000 a year, where as under the new scheme, with 3 children you could get a maximum of £6000 a year.

Maybe look at your current costs, under the new scheme how much would you get? If your childcare cost is £24,000 then I think the new scheme would mean you pay £20,000 and Government adds £4000. If that is the case and you currently get £2000, then the new scheme is better for you.

I would try not to see if you can afford a nanny under the new scheme, instead see if you can afford a nanny under the current scheme. Look at job ads for nannies in your area, try to work out what salaries are typically on offer. Try to work out the other costs involved like activities, mileage, bit extra on food/heat/light, the cost of employers national insurance and payroll admin.

www.mranchovy.com/calc is a useful calculator.

Thank you, that calculator is useful - I need to work it all out. Do you know how much payroll admin costs? I had a look at nannypaye website but couldn't see anything on fees?

Payefornannies is around £130 a year, for monthly payroll. Weekly payroll costs more.

Thanks!